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June 29, 2009

Court Leaders Try To Imagine Budgetless (Immediate) Future

As California crept closer to the 2008-09 fiscal year, lawmakers and the governor appeared no nearer to patching a $24 billion budget hole by midnight Tuesday and eliminating the need for IOUs to go out Thursday. That’s left court leaders and attorneys scrambling to figure out what they’ll do if some of the cash stops flowing later this week.

State Controller John Chiang has said that all court employees will continue to be paid, whether or not lawmakers agree to a budget fix. Less clear is what will happen to the many vendors who provide goods and services to the courts, including contract security screeners and appointed counsel. The controller intends to issue $41 million in IOUs for non-salary judicial branch operations.

Nobody loves a budget crisis, after the jump.

Late Monday afternoon, AOC chief executive Bill Vickrey said that it now appears appointed counsel in appellate cases will receive IOUs from the state. The controller’s office has not clarified, however, whether appointed attorneys working dependency cases in trial courts will receive IOUs or their normal reimbursement, Vickrey said.

Walter Pyle, president of California Appellate Defense Counsel, said his members are full of questions at this point.

“There’s been a lot of discussion — Can we get a loan? Can we get a line of credit? Do I have to own a house to get credit?” Pyle said. Pyle said he’d heard about one credit union willing to honor the IOUs for members, but he added that he’d heard conflicting information from other banks.

IOUs issued in July will be redeemable, with interest, in October.

It’s still not clear either how the lack of cash will affect individual courts’ operations. Vickrey said some court executives have expressed worries about running out of money if the budget impasse drags on while others said they should be able to rely on reserves for a short time.

Legislative Democrats have tried to pass a package of bills that would free up enough cash to avoid the need for IOUs, perhaps for more than a month. But Senate Republicans and the governor have balked at the proposal, arguing that lawmakers need to fix the entire $24 billion problem all at once.

In related news, the state Assembly late Sunday passed so-called trailer bill language that cements the budget deal agreed to by the AOC, lawmakers, labor and attorney groups and sheriffs. The bill raises various civil and criminal fees and authorizes the AOC to close courthouses once a month. Judges will be able to sign a form giving up 4.62 percent of their salaries — a show of solidarity with court workers expected to be furloughed without pay one day a month — without hurting their pension levels.

The bill also calls on sheriffs to negotiate a 4.62 percent cut in their contracts for court security on the grounds that bailiffs will not work on courthouse closure days. Sheriffs are not happy with the provision, questioning whether they can be forced to rework labor agreements, although law enforcement representatives say they’ll continue to work with court leaders on costs.

The bill also requires the AOC to vet all significant IT projects in the works with the Legislature and state tech experts and to make public more financial statements via the Internet.